S&P 500: Should You Follow the Popular Opinion About This Bull Market?

investing.com:

I read several articles discussing the stock market, as I want to maintain a pulse on the common views. And, sometimes I run across something that compels me to write an article. I would say that this is the driver for the current missive. Allow me to quote something that I read, which I really think needs to be addressed:

«The efficient market hypothesis states that the market correctly prices all incoming information, and the future price move is a function of the new information. Thus, to predict the market moves you need to predict the future information. Looking at the charts is looking at history, and that's not very helpful. So, why even look at the chart, and the recent parabolic move, it doesn't matter. As long as the fundamental view of no imminent recession holds, the market is likely to move higher.»

I want to spend the rest of this article discussing the paragraph I quoted above. Again, while I do understand that most of the readers here probably maintain the same perspective as the writer of that article, I sincerely hope you at least open your mind to what I am going to say, as it may be quite enlightening.

The first thing I want to address is the writer’s reliance on the efficient market hypothesis. Anyone who has done any real in-depth work on the efficient market hypothesis usually concludes that it is a preposterous and unworkable methodology in the real world.

It is what is best viewed as an ivory-tower-type hypothesis, but does not have any true value in the real world, as it ignores the emotional/sentiment drivers in the market. Just reviewing the underlying assumptions within the hypothesis tells you that it is utterly ridiculous.

Let’s now move to the second sentence. Based upon the writer’s view